HCL Technologies results for Q3FY14 adds more joy to its
shareholders. A record performance for 11 continuous quarters. Stock gains more
than 4% on the result day.
Sales grow above 38%.
Earnings grow above 77%, superb growth.
Profit margin improves by more than 29%.
Nectar is flowing leaps and bounds.
Trailing twelve month sales grows more than 44% and the earnings
grow more than 87%.
There are some pessimistic news making rounds about whether such
high growth can be sustained and analysts showing concerns about their
recommendation on this stock.
Even if it has to slow down, there is nothing to lose for
those who identified its rocket speed in 2011, investments in this stock has
given a total yield of 200% in near 3 years which is tax free in the hands of the
investor now. When a stock is in flight speed, with consistency, it cannot come
to an abrupt halt, if there is a slow down like some pessimist analysts feels,
it will take at least 2 to 3 quarters to show up.
2014 is likely to be a year for the service industry,
domestic business may or may not be good, but, international is likely to be
robust by all means. In the last 12 months the top gaining economies have been
the US and Japan. HCL has established very strong presence in Japan. Japan is
likely to give a very big boost to the IT sector and it is a niche market,
where language plays an important role. Only those who have already setup the
base can reap the rewards in this market. For HCL Tech, all of these are already
in place. A clear indication that the speed and momentum will continue.
What can be the potential gain from current levels?
The stock has had a strong run up, while still having steam
left in it. Enter on a correction and expect at least 30% gain in the next 12
months.
This is a stock that is a must hold in any portfolio, so,
hop in and enjoy the ride.
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